Xstrata sees year on year production increase

Xstrata has announced across the board production increases on its global projects, seeing a jump in every field apart from copper and gold.

In its latest release, the miner states that it reached record coal production levels of 90.4 million tonnes, 7% higher than 2011.

"Thermal coal production from our Australian operations, including semi-soft production, totalled 53.2 million tonnes, an increase of 7% from 2011," it said.

"Increased volumes predominantly resulted from the restart of mining at Blakefield South, commencement of mining at Ravensworth North, Ulan West and Ulan open cut, and the return to full production at Rolleston following flooding in 2011."

However it added that "the increase was partially off-set by end of mine life closures at Ravensworth West and Westside during 2012 and at Baal Bone in late 2011".

Despite this, Xstrata did record a dip in its coking coal production, which was 9% lower in 2012 compared to 2011.

It explained that an initial increased production was offset by engineering challenges at Oaky Creek North, where it faced a new thin seam longwall.

Xstrata saw a massive spike in its South African coal operations, noting a 16% jump compared to the previous period.

A lower price for coal, particularly for coking coal which saw a drop from US$ 265 per tonne down to only US$ 198, also dampened its end of year profits.

Overall nickel production jumped for the miner.

However for its Australian operations it was 7% lower, which was mainly due to the decision to shut the Cosmos mine in Western Australia.

Yet this was offset to a degree by increased output at the nearby Sinclair mine, where production was 21% above mine plan.

Regarding zinc Xstrata achieved another record year, recording volumes 8% higher than 2011, which was also a record year.

"Total lead in concentrate production increased by 9% compared to 2011, mainly as a result of record volumes of lead in concentrate production at Mount Isa Mines. Improved lead ore grades at our Australian operations more than offset lower head grades at our Canadian operations," Xstrata added.

"We also approved the $360 million (AUD360 million) Phase 3 expansion of Xstrata Zinc’s McArthur River Mine that will increase annual production to an average of 380,000 tonnes of zinc in conventional concentrate from 2014."

The miner recorded a disappointing year for copper, producing only 747 000 tonnes, 16% lower than 2011.
It put the slump down to its transition from older end of life mines to new operations and its expansion of existing mines.

Xstrata went on to state that "our production steadily increased during 2012 as we commissioned and/or ramped up five organic growth projects reaching an annualised production rate of approximately 900,000 tonnes in December 2012 compared to 700,000 tonnes in January 2012".

"Planned lower production at the Ernest Henry mine contributed 34,100 tonnes of copper in concentrate in 2012, a reduction of 66% compared to 2011, as the operation transitioned to underground mining following the completion of the open pit in December 2011.

Gold also fell year on year, decreasing nearly 20% due to lower grades and the closure of the Ernest Henry open cut operations in 2011.

"During the year, the new underground decline mine continued to ramp up to mining rates of 3 million tonnes per year and the satellite Mount Margaret open pit commenced production in September," it said.

"Ernest Henry will produce an average of approximately 70,000 tonnes of copper in concentrate per annum from the combined underground mining and Mount Margaret open pit operations."

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